Ben Bernanke, in a letter addresses to Senator Schumer outlined some high-level thoughts that the Fed Chairman has to help alleviate the pending ARM-reset foreclosure wave. Bernanke calls for innovative mortgage products and more buying capacity for Freddie and Fannie to help subprime borrowers trapped in exploding ARMs.
From Market Watch:
The private sector and Congress should create new, affordable mortgage products that would help some homeowners refinance their mortgages and keep their homes, Federal Reserve Chairman Ben Bernanke suggested in a letter released Wednesday.
…
In his letter, Bernanke called for creative thinking to get the nation out of its subprime mess.
“It might be worth considering at this juncture whether the private and public sectors, separately or in collaboration, could help the situation by developing a broader range of mortgage products which are appropriate for low-and moderate-income borrowers, including those seeking to refinance,” Bernanke wrote.
“Such products could be designed to avoid or mitigate the risk of payment shock and to be more transparent with respect to their terms,” Bernanke wrote. “They might also contain features to improve affordability, such as variable maturities or shared-appreciation provisions for example.”
What do you think?
If you couldn’t tell by my lack of posting, it’s been a busy day for me here; so I’ll have more thoughts on this later this evening.
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[Source: Blown Mortgage]
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